For the record “Cashing out a 401k” is not an option the IRS affords us here in America. There are severe penalties for doing so, and you see pennies on the dollar when it’s all said and done. Also for the record, I haven’t put any money into my 401k since I bought the house, I shifted all my investment dollars into the house which was obviously a bad investment, and an important lesson has been learned here. Even if I did cash out my 401k, that would only delay the pain another 3-6 months, and wouldn’t make that much difference at the end of the day.
A home is a HOME not an INVESTMENT. The mistake I made was I got caught into the buy now mentality that millions of other Americans got caught into back in 2004 when the real estate market was sky rocketing, and even though I was perfectly content in my $1500 a month luxury apartment with a pool, jacuzzi, work out room, and all the amenities, I couldn’t resist the evil temptation of “Sweet equity”. Had I thought of it apples to apples between the apartment and the house I bought, I would have taken the apartment any day of the week both for lack of having to do any maintenance and for all the on-site amenities that a gated new apartment community affords. And my loan officer and my realtor were coaching me all the way along making statements like “I know this payment will adjust in 3 years, but the market is so hot you’ll be able to sell or refinance before then”… Yep, we’ve heard all this before.
I made the mistake, and so now I have to live with it. Can you blame me for at least trying to work with my lender and trying to keep the house instead of just walking away from it and making it someone else’s problem? I’m trying to do other people who are also struggling a favor and sharing my experience with them so they know what they’re up against if they decide to try to do the same thing. I didn’t have to spend my time posting on here but I did so as a service to others. Sometimes I wonder if all you folks on here that say throw in the keys are the same ones that go buy these properties at real estate auctions!
